Bright future for kei-cars
When driving around on Japanese highways, there’ll be a couple of things you expect. A massive amount of Toyota, Mazda and Nissan. The odd Mercedes, usually white and pretty high end – the Japanese like AMG, especially in the super popular G Class. And obviously thousands of boxy Toyota Crown Comfort taxis, 360.000 to be exact, in black, orange or yellow
Another thing about Japan is that most cars look brand new. The Japanese tend to maintain and clean their cars pretty well and it’s considered to be a bit not-done to drive around in a dirty vehicle. The average age of the Japanese car park is a bit over 8 years, up 1 year compared to 2007.
Driving a car in Japan can be expensive. It’s not that much that retail price that differ from those in Europe or the US, nor do the essential taxes. You’d pay an excise tax (sort of registration tax) and an annual vehicle tax, like in any other country. The tax rates are based on the engine size and low emission vehicles benefit from a tax discount.
More than car taxation
What makes a car pricy, especially in Tokyo, is the mandatory car parking. Upon registration, the authorities will ask you for a shako shomeisho, a parking space certificate. For people who live in a small apartment in city centre Tokyo, such as yours truly, a dedicated parking costs about $500 per month, which is a $100 in excess of the lease cost of a Prius.
In addition to the cost of the parking space, there’s the shaken, the Japanese equivalent of MOT or road-worthy car inspection. You’d get your shaken for the first time when the car is 3 years old and renew it every 2 years. Each time submit your car out for inspection (which, by the way, very few Japanese will do by themselves. It’s common to outsource it to the car dealer, service station or other shaken service providers), you’ll pay for the Vehicle Weight Tax, the compulsory third-party insurance and a processing fee. Expect a $1000 for a small car in perfect condition and much, much more for your shiny G Class AMG.
The kanji in the title read as “kei jidōsha” or “light automobile”, but everyone calls them kei-cars. Kei-cars are small vehicles, maximum 3.4 meters long, 2 meters high and 1.48 meters wide. The engine size is equal or below to 660cc and they produce less than 65PS.
The benefit of the kei-cars and their popularity is due to the tax discounts. The excise tax is 3% instead of 5% for normal vehicles, the weight tax is 30% cheaper, the insurance cost is more than 10% lower and the annual road tax, calculated on the engine size, is remarkably lower than that of your biturbo 6.3 litre machine.
Yes!! Horrendous, to be honest. The Japanese OEMs have been trying combine the size limitation with as many features and space as possible. It has resulted in a generically square oversized shoe box on tiny wheels in which maximum 4 people can enjoy a – preferably very short – claustrophobic ride.
Surprisingly enough, today’s kei-cars are extremely well equipped. Led lights, automatic transmission, power sliding doors, all of the safety features that would cost you an arm and a leg at any European brand, big screen satnav,… you name it. The OEMs are also trying their best to give the kei-cars a bit of a “personality” by focusing on details such as the front grill and the headlights. Generally, the design is following 2 directions: increasing the window surface by lowering the windowsill and making the car taller, and increasing the size of the door openings.
Kei-cars sell well. The Japanese customer is practical before being emotional about cars and, especially in the city, a small car is extremely practical. Don’t forget, Tokyo is not only about 4-lane highways; most of city features extremely narrow roads with many corners and angles.
In figures, 1,443.367 kei-cars were sold in 2017 on a total car sales volume of 4,786,352 (source: markline). Considering the efforts of the OEMs to make these vehicles less painful to look at, more economical and more comfortable, the kei-car penetration will most probably remain high for a next couple of years
Daihatsu, Honda and Suzuki are the top 3 producers of mini-cars. But in reality, the biggest competitor of the kei-car is public transport. People who buy these cars, are in reality upgrading from train or bus rather than downgrading from a normal sized car.
For this reason, the kei-car driver might also become a target for mobility solutions. The mini-cars are mainly used for short distance transits, mostly in a limited radius around the owner’s house. Their owners are essentially looking for a tool to get from one place in the city to another in the cheapest and most practical way. The user behaviour is very similar to that of a ride hailing or car sharing customer.
The vehicle design in itself is also very close to the new mobility design concepts that OEMs have started to demonstrate, the so-called “small – medium – large boxes”. Previously, the OEMs would design vehicles based on what the client “likes” whereas we see a shift towards design based on “how the vehicle is used”.
A bright future for the kei-cars? We think so!